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Doing business in Thailand
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SoEconomy
Economy Profile:
St. Thailand
2 Thailand Doing Business 2014
2013 The International Bank for Reconstruction and Development /
The World Bank
1818 H Street NW, Washington, DC 20433
Telephone: 202-473-1000; Internet: www.worldbank.org
All rights reserved.
1 2 3 4 15 14 13 12
A copublication of The World Bank and the International Finance Corporation.
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of claims resulting from such infringement rests solely with you.
The findings, interpretations, and conclusions expressed in this work do not
necessarily reflect the views of The World Bank, its Board of Executive Directors, or
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Commons Attribution license, you are free to copy, distribute, transmit, and adapt
this work, including for commercial purposes, under the following conditions:
AttributionPlease cite the work as follows: World Bank. 2013. Doing Business 2014:
Understanding Regulations for Small and Medium-Size Enterprises. Washington, DC:
World Bank Group. DOI: 10.1596/978-0-8213-9615-5. License: Creative Commons
Attribution CC BY 3.0
TranslationsIf you create a translation of this work, please add the following
disclaimer along with the attribution: This translation was not created by The World
Bank and should not be considered an official World Bank translation. The World Bank
shall not be liable for any content or error in this translation.
All queries on rights and licenses should be addressed to the Office of the Publisher,
The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625;
e-mail: [email protected].
Additional copies of all 11 editions of Doing Business may be purchased at
www.doingbusiness.org.
Cover design: The Word Express
3 Thailand Doing Business 2014
CONTENTS
Introduction .................................................................................................................................. 4
The business environment .......................................................................................................... 5
Starting a business ..................................................................................................................... 14
Dealing with construction permits ........................................................................................... 24
Getting electricity ....................................................................................................................... 33
Registering property .................................................................................................................. 40
Getting credit .............................................................................................................................. 49
Protecting investors ................................................................................................................... 56
Paying taxes ................................................................................................................................ 65
Trading across borders .............................................................................................................. 72
Enforcing contracts .................................................................................................................... 80
Resolving insolvency .................................................................................................................. 90
Employing workers .................................................................................................................... 95
Data notes ................................................................................................................................. 102
Resources on the Doing Business website ............................................................................ 108
4 Thailand Doing Business 2014
INTRODUCTION
Doing Business sheds light on how easy or difficult it is
for a local entrepreneur to open and run a small to
medium-size business when complying with relevant
regulations. It measures and tracks changes in
regulations affecting 11 areas in the life cycle of a
business: starting a business, dealing with construction
permits, getting electricity, registering property,
getting credit, protecting investors, paying taxes,
trading across borders, enforcing contracts, resolving
insolvency and employing workers.
In a series of annual reports Doing Business presents
quantitative indicators on business regulations and the
protection of property rights that can be compared
across 189 economies, from Afghanistan to Zimbabwe,
over time. The data set covers 47 economies in Sub-
Saharan Africa, 33 in Latin America and the Caribbean,
25 in East Asia and the Pacific, 25 in Eastern Europe
and Central Asia, 20 in the Middle East and North
Africa and 8 in South Asia, as well as 31 OECD high-
income economies. The indicators are used to analyze
economic outcomes and identify what reforms have
worked, where and why.
This economy profile presents the Doing Business
indicators for Thailand. To allow useful comparison, it
also provides data for other selected economies
(comparator economies) for each indicator. The data in
this report are current as of June 1, 2013 (except for
the paying taxes indicators, which cover the period
JanuaryDecember 2012).
The Doing Business methodology has limitations. Other
areas important to businesssuch as an economys
proximity to large markets, the quality of its
infrastructure services (other than those related to
trading across borders and getting electricity), the
security of property from theft and looting, the
transparency of government procurement,
macroeconomic conditions or the underlying strength
of institutionsare not directly studied by Doing
Business. The indicators refer to a specific type of
business, generally a local limited liability company
operating in the largest business city. Because
standard assumptions are used in the data collection,
comparisons and benchmarks are valid across
economies. The data not only highlight the extent of
obstacles to doing business; they also help identify the
source of those obstacles, supporting policy makers in
designing regulatory reform.
More information is available in the full report. Doing
Business 2014 presents the indicators, analyzes their
relationship with economic outcomes and presents
business regulatory reforms. The data, along with
information on ordering Doing Business 2014, are
available on the Doing Business website at
http://www.doingbusiness.org.
5 Thailand Doing Business 2014
THE BUSINESS ENVIRONMENT
For policy makers trying to improve their economys
regulatory environment for business, a good place to
start is to find out how it compares with the regulatory
environment in other economies. Doing Business
provides an aggregate ranking on the ease of doing
business based on indicator sets that measure and
benchmark regulations applying to domestic small to
medium-size businesses through their life cycle.
Economies are ranked from 1 to 189 by the ease of
doing business index. For each economy the index is
calculated as the ranking on the simple average of its
percentile rankings on each of the 10 topics included in
the index in Doing Business 2014: starting a business,
dealing with construction permits, getting electricity,
registering property, getting credit, protecting
investors, paying taxes, trading across borders,
enforcing contracts and resolving insolvency. The
ranking on each topic is the simple average of the
percentile rankings on its component indicators (see
the data notes for more details). The employing workers
indicators are not included in this years aggregate ease
of doing business ranking, but the data are presented
in this years economy profile.
The aggregate ranking on the ease of doing business
benchmarks each economys performance on the
indicators against that of all other economies in the
Doing Business sample (figure 1.1). While this ranking
tells much about the business environment in an
economy, it does not tell the whole story. The ranking on
the ease of doing business, and the underlying
indicators, do not measure all aspects of the business
environment that matter to firms and investors or that
affect the competitiveness of the economy. Still, a high
ranking does mean that the government has created a
regulatory environment conducive to operating a
business.
ECONOMY OVERVIEW
Region: East Asia & Pacific
Income category: Upper middle income
Population: 66,785,001
GNI per capita (US$): 5,210
DB2014 rank: 18
DB2013 rank: 18*
Change in rank: 0
DB 2014 DTF: 75.9
DB 2013 DTF: 75.46
Change in DTF: 0.4
* DB2013 ranking shown is not last years published
ranking but a comparable ranking for DB2013 that
captures the effects of such factors as data
corrections and the addition of 4 economies (Libya,
Myanmar, San Marino and South Sudan) to the
sample this year. See the data notes for sources and
definitions.
6 Thailand Doing Business 2014
THE BUSINESS ENVIRONMENT
Figure 1.1 Where economies stand in the global ranking on the ease of doing business
Source: Doing Business database.
7 Thailand Doing Business 2014
THE BUSINESS ENVIRONMENT
For policy makers, knowing where their economy
stands in the aggregate ranking on the ease of
doing business is useful. Also useful is to know how
it ranks relative to comparator economies and
relative to the regional average (figure 1.2). The
economys rankings on the topics included in the
ease of doing business index provide another
perspective (figure 1.3).
Figure 1.2 How Thailand and comparator economies rank on the ease of doing business
Source: Doing Business database.
8 Thailand Doing Business 2014
THE BUSINESS ENVIRONMENT
Figure 1.3 How Thailand ranks on Doing Business topics
Source: Doing Business database.
9 Thailand Doing Business 2014
THE BUSINESS ENVIRONMENT
Just as the overall ranking on the ease of doing business
tells only part of the story, so do changes in that ranking.
Yearly movements in rankings can provide some indication
of changes in an economys regulatory environment for
firms, but they are always relative.
Moreover, year-to-year changes in the overall rankings do
not reflect how the business regulatory environment in an
economy has changed over timeor how it has changed
in different areas. To aid in assessing such changes,
Doing Business introduced the distance to frontier
measure. This measure shows how far on average an
economy is from the best performance achieved by any
economy on each Doing Business indicator since 2005,
except for the getting electricity indicators, which were
introduced in 2009.
Comparing the measure for an economy at 2 points in
time allows users to assess how much the economys
regulatory environment as measured by Doing Business
has changed over timehow far it has moved toward (or
away from) the most efficient practices and strongest
regulations in areas covered by Doing Business (figure 1.4).
Figure 1.4 How far has Thailand come in the areas measured by Doing Business?
Note: The distance to frontier measure shows how far on average an economy is from the best performance achieved by any
economy on each Doing Business indicator since 2005, except for the getting electricity indicators, which were introduced in 2009. The
measure is normalized to range between 0 and 100, with 100 representing the best performance (the frontier). The overall distance to
frontier is the average of the distance to frontier in the first 9 indicator sets shown in the figure and does not include getting
electricity. Data on the overall distance to frontier including getting electricity is available at
http://www.doingbusiness.org/data/distance-to-frontier. See the data notes for more details on the distance to frontier measure.
Source: Doing Business database.
10 Thailand Doing Business 2014
THE BUSINESS ENVIRONMENT
The absolute values of the indicators tell another part
of the story (table 1.1). The indicators, on their own or
in comparison with the indicators of a good practice
economy or those of comparator economies in the
region, may reveal bottlenecks reflected in large
numbers of procedures, long delays or high costs. Or
they may reveal unexpected strengths in an area of
business regulationsuch as a regulatory process that
can be completed with a small number of procedures
in a few days and at a low cost. Comparison of the
economys indicators today with those in the previous
year may show where substantial bottlenecks persist
and where they are diminishing.
Table 1.1 Summary of Doing Business indicators for Thailand
Indicator
Th
ail
an
d D
B2
01
4
Th
ail
an
d D
B2
01
3
Ind
on
esi
a D
B2
01
4
Lao
PD
R D
B2
01
4
Mala
ysi
a D
B2
01
4
Myan
mar
DB
20
14
Ph
ilip
pin
es
DB
20
14
Tim
or-
Lest
e D
B2
01
4
Best
perf
orm
er
glo
ball
y
DB
20
14
Starting a Business
(rank) 91 86 175 85 16 189 170 154 New Zealand (1)
Procedures (number) 4 4 10 6 3 11 15 8 New Zealand (1)*
Time (days) 27.5 29.0 48.0 92.0 6.0 72.0 35.0 94.0 New Zealand (0.5)
Cost (% of income per
capita) 6.7 6.7 20.5 6.7 7.6 176.7 18.7 3.1 Slovenia (0.0)
Paid-in Min. Capital (%
of income per capita) 0.0 0.0 38.5 0.0 0.0 7,016.0 4.6 136.2 112 Economies (0.0)*
Dealing with
Construction Permits
(rank)
14 13 88 96 43 150 99 128 Hong Kong SAR,
China (1)
Procedures (number) 8 8 13 23 15 16 25 19 Hong Kong SAR,
China (6)
Time (days) 157.0 157.0 158.0 108.0 130.0 159.0 77.0 238.0 Singapore (26.0)
11 Thailand Doing Business 2014
Indicator
Th
ail
an
d D
B2
01
4
Th
ail
an
d D
B2
01
3
Ind
on
esi
a D
B2
01
4
Lao
PD
R D
B2
01
4
Mala
ysi
a D
B2
01
4
Myan
mar
DB
20
14
Ph
ilip
pin
es
DB
20
14
Tim
or-
Lest
e D
B2
01
4
Best
perf
orm
er
glo
ball
y
DB
20
14
Cost (% of income per
capita) 8.3 9.2 87.2 45.8 14.7 566.9 79.4 15.0 Qatar (1.1)
Getting Electricity
(rank) 12 12 121 140 21 126 33 44 Iceland (1)
Procedures (number) 4 4 6 5 5 5 5 3 10 Economies (3)*
Time (days) 35 35 101 134 32 91 42 63 Germany (17)
Cost (% of income per
capita) 67.3 75.3 370.6 1,913.0 49.1 3,175.5 118.2 638.0 Japan (0.0)
Registering Property
(rank) 29 26 101 76 35 154 121 189 Georgia (1)
Procedures (number) 2 2 6 5 5 6 8 no
practice 4 Economies (1)*
Time (days) 2.0 2.0 22.0 98.0 14.0 113.0 39.0 no
practice New Zealand (1.0)*
Cost (% of property
value) 6.3 6.3 10.9 1.1 3.3 7.2 4.8
no
practice 5 Economies (0.0)*
Getting Credit (rank) 73 71 86 159 1 170 86 165 Malaysia (1)*
Strength of legal rights
index (0-10) 5 5 5 4 10 4 4 2 10 Economies (10)*
Depth of credit
information index (0-6) 5 5 4 2 6 0 5 3 31 Economies (6)*
Public registry coverage
(% of adults) 0.0 0.0 41.2 2.4 52.9 0.0 0.0 5.4 Portugal (100.0)*
Private bureau
coverage (% of adults) 49.2 44.1 0.0 0.0 77.2 0.0 9.3 0.0 22 Economies (100.0)*
Protecting Investors
(rank) 12 12 52 187 4 182 128 115 New Zealand (1)
12 Thailand Doing Business 2014
Indicator
Th
ail
an
d D
B2
01
4
Th
ail
an
d D
B2
01
3
Ind
on
esi
a D
B2
01
4
Lao
PD
R D
B2
01
4
Mala
ysi
a D
B2
01
4
Myan
mar
DB
20
14
Ph
ilip
pin
es
DB
20
14
Tim
or-
Lest
e D
B2
01
4
Best
perf
orm
er
glo
ball
y
DB
20
14
Extent of disclosure
index (0-10) 10 10 10 2 10 3 2 5 10 Economies (10)*
Extent of director
liability index (0-10) 7 7 5 1 9 0 3 4 Cambodia (10)
Ease of shareholder
suits index (0-10) 6 6 3 2 7 4 8 5 3 Economies (10)*
Strength of investor
protection index (0-10) 7.7 7.7 6.0 1.7 8.7 2.3 4.3 4.7 New Zealand (9.7)
Paying Taxes (rank) 70 97 137 119 36 107 131 55 United Arab Emirates
(1)
Payments (number per
year) 22 22 52 34 13 31 36 18
Hong Kong SAR,
China (3)*
Time (hours per year) 264 264 259 362 133 155 193 276 United Arab Emirates
(12)
Trading Across Borders
(rank) 24 25 54 161 5 113 42 92 Singapore (1)
Documents to export
(number) 5 5 4 10 4 9 6 6 Ireland (2)*
Time to export (days) 14 14 17 23 11 25 15 28 5 Economies (6)*
Cost to export (US$ per
container) 595 585 615 1,950 450 670 585 750 Malaysia (450)
Documents to import
(number) 5 5 8 10 4 9 7 7 Ireland (2)*
Time to import (days) 13 13 23 26 8 27 14 26 Singapore (4)
Cost to import (US$ per
container) 760 750 660 1,910 485 660 660 755 Singapore (440)
Enforcing Contracts
(rank) 22 22 147 104 30 188 114 189 Luxembourg (1)
13 Thailand Doing Business 2014
Indicator
Th
ail
an
d D
B2
01
4
Th
ail
an
d D
B2
01
3
Ind
on
esi
a D
B2
01
4
Lao
PD
R D
B2
01
4
Mala
ysi
a D
B2
01
4
Myan
mar
DB
20
14
Ph
ilip
pin
es
DB
20
14
Tim
or-
Lest
e D
B2
01
4
Best
perf
orm
er
glo
ball
y
DB
20
14
Time (days) 440 440 498 443 425 1,160 842 1,285 Singapore (150)
Cost (% of claim) 15.0 15.0 139.4 31.6 27.5 51.5 26.0 163.2 Bhutan (0.1)
Procedures (number) 36 36 40 42 29 45 37 51 Singapore (21)*
Resolving Insolvency
(rank) 58 58 144 189 42 155 100 189 Japan (1)
Time (years) 2.7 2.7 4.5 no
practice 1.5 5.0 2.7
no
practice Ireland (0.4)
Cost (% of estate) 36 36 18 no
practice 10 18 22
no
practice Norway (1)
Outcome (0 as
piecemeal sale and 1 as
going concern)
1 1 0 no
practice 0 0 0
no
practice
Recovery rate (cents on
the dollar) 42.2 42.4 17.9 0.0 48.9 14.7 29.9 0.0 Japan (92.8)
Note: DB2013 rankings shown are not last years published rankings but comparable rankings for DB2013 that capture the effects of
such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this
year. For more information on no practice marks, see the data notes.
* Two or more economies share the top ranking on this indicator. A number shown in place of an economys name indicates the
number of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website
(http://www.doingbusiness.org).
Source: Doing Business database.
14 Thailand Doing Business 2014
STARTING A BUSINESS
Formal registration of companies has many
immediate benefits for the companies and for
business owners and employees. Legal entities can
outlive their founders. Resources are pooled as
several shareholders join forces to start a company.
Formally registered companies have access to
services and institutions from courts to banks as
well as to new markets. And their employees can
benefit from protections provided by the law. An
additional benefit comes with limited liability
companies. These limit the financial liability of
company owners to their investments, so personal
assets of the owners are not put at risk. Where
governments make registration easy, more
entrepreneurs start businesses in the formal sector,
creating more good jobs and generating more
revenue for the government.
What do the indicators cover?
Doing Business measures the ease of starting a
business in an economy by recording all
procedures officially required or commonly done in
practice by an entrepreneur to start up and
formally operate an industrial or commercial
businessas well as the time and cost required to
complete these procedures. It also records the
paid-in minimum capital that companies must
deposit before registration (or within 3 months).
The ranking on the ease of starting a business is
the simple average of the percentile rankings on
the 4 component indicators: procedures, time, cost
and paid-in minimum capital requirement.
To make the data comparable across economies,
Doing Business uses several assumptions about the
business and the procedures. It assumes that all
information is readily available to the entrepreneur
and that there has been no prior contact with
officials. It also assumes that the entrepreneur will
pay no bribes. And it assumes that the business:
Is a limited liability company, located in the
largest business city and is 100% domestically
owned.
Has between 10 and 50 employees.
Conducts general commercial or industrial
activities.
WHAT THE STARTING A BUSINESS
INDICATORS MEASURE
Procedures to legally start and operate a
company (number)
Preregistration (for example, name
verification or reservation, notarization)
Registration in the economys largest
business city
Postregistration (for example, social security
registration, company seal)
Time required to complete each procedure
(calendar days)
Does not include time spent gathering
information
Each procedure starts on a separate day (2
procedures cannot start on the same day).
Procedures that can be fully completed
online are an exception to this rule.
Procedure completed once final document is
received
No prior contact with officials
Cost required to complete each procedure
(% of income per capita)
Official costs only, no bribes
No professional fees unless services required
by law
Paid-in minimum capital (% of income
per capita)
Deposited in a bank or with a notary before
registration (or within 3 months)
Has a start-up capital of 10 times income per
capita.
Has a turnover of at least 100 times income per
capita.
Does not qualify for any special benefits.
Does not own real estate.
15 Thailand Doing Business 2014
STARTING A BUSINESS
Where does the economy stand today?
What does it take to start a business in Thailand?
According to data collected by Doing Business, starting
a business there requires 4 procedures, takes 27.5
days, costs 6.7% of income per capita and requires
paid-in minimum capital of 0.0% of income per capita
(figure 2.1).
Figure 2.1 What it takes to start a business in Thailand
Paid-in minimum capital (% of income per capita): 0.0
Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the
total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business
website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this
chapter.
Source: Doing Business database.
16 Thailand Doing Business 2014
STARTING A BUSINESS
Globally, Thailand stands at 91 in the ranking of 189
economies on the ease of starting a business (figure
2.2). The rankings for comparator economies and the
regional average ranking provide other useful
information for assessing how easy it is for an
entrepreneur in Thailand to start a business.
Figure 2.2 How Thailand and comparator economies rank on the ease of starting a business
Source: Doing Business database.
17 Thailand Doing Business 2014
STARTING A BUSINESS
What are the changes over time?
The benchmarks provided by the economies that over
time have had the best performance regionally or
globally on the procedures, time, cost or paid-in
minimum capital required to start a business (figure
2.3) can help show what is possible in making it easier
to start a business. And changes in regional averages
can show where Thailand is keeping upand where it
is falling behind.
Figure 2.3 Has starting a business become easier over time?
Procedures (number)
Time (days)
18 Thailand Doing Business 2014
STARTING A BUSINESS
Cost (% of income per capita)
Paid-in minimum capital (% of income per capita)
Note: Ninety economies globally have no paid-in minimum capital requirement. DB2013 rankings shown are not last years
published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and
the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year.
Source: Doing Business database.
19 Thailand Doing Business 2014
STARTING A BUSINESS
Economies around the world have taken steps making
it easier to start a businessstreamlining procedures
by setting up a one-stop shop, making procedures
simpler or faster by introducing technology and
reducing or eliminating minimum capital requirements.
Many have undertaken business registration reforms in
stagesand they often are part of a larger regulatory
reform program. Among the benefits have been
greater firm satisfaction and savings and more
registered businesses, financial resources and job
opportunities.
What business registration reforms has Doing Business
recorded in Thailand (table 2.1)?
Table 2.1 How has Thailand made starting a business easieror not?
By Doing Business report year
DB year Reform
DB2009 No reform as measured by Doing Business.
DB2010
Thailand eased business start up process by merging the
registration of memorandum and the application for
registration of establishment of company
DB2011 No reform as measured by Doing Business.
DB2012 Thailand made starting a business easier by introducing a one-
stop shop.
DB2013
Thailand made starting a business easier by allowing the
registrar at the Department of Business Development to
receive the companys work regulations.
DB2014 No reform as measured by Doing Business.
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
20 Thailand Doing Business 2014
STARTING A BUSINESS
What are the details?
Underlying the indicators shown in this chapter for
Thailand is a set of specific proceduresthe
bureaucratic and legal steps that an entrepreneur
must complete to incorporate and register a new
firm. These are identified by Doing Business
through collaboration with relevant local
professionals and the study of laws, regulations and
publicly available information on business entry in
that economy. Following is a detailed summary of
those procedures, along with the associated time
and cost. These procedures are those that apply to
a company matching the standard assumptions
(the standardized company) used by Doing
Business in collecting the data (see the section in
this chapter on what the indicators measure).
STANDARDIZED COMPANY
City: Bangkok
Legal Form: Private Limited Liability Company
Paid in Minimum Capital Requirement: THB 4
Start-up Capital: 10 times GNI per capita
Summary of procedures for starting a business in Thailandand the time and cost
No. Procedure Time to
complete Cost to complete
1
Search and reserve a company name online
Promoters can search and reserve a company name on the Department
of Business Developments Web site (www.thairegistration.com or
www.dbd.go.th). The name reservation in person at the Departments
Registrar is no longer available since 14 January, 2013.
Procedure can be done online
Less than one day
(online procedure) no charge
2
Deposit paid-in capital in a bank
Once the company gets approval for the memorandum and the articles
of association, it must hold a statutory meeting. The promoters shall
hand over the business to the directors after the meeting. The directors
shall thereupon cause the promoters and subscribers to pay in at least
25% of the registered capital.
1 day no charge
3
Obtain a corporate seal
According to Thai law, a company is not required to have a corporate
seal except for affixation on company share certificates. In practice,
however, a Thai company usually affixes its corporate seal to other
documents. The cost of such seal is THB 400 on average, and it can be
ordered and purchased via private stationeries. The cost of an urgent
order is THB 700 -800 and it takes about 2 days to make the seal.
4 days THB 400
21 Thailand Doing Business 2014
No. Procedure Time to
complete Cost to complete
4
Get approval for memorandum of association, apply to register the
company as a legal entity (final registration) and also submit
company work regulations
In October 2010, the Department of Business Development opened its
one-stop shop: the Single Point Service Center. At the Single Point
Service Center, entrepreneur can register for social security and register
for the Workmens Compensation Fund. These were previously
undertaken by 2 different government agencies.
The Department of Business Development also receives the work
regulations and then forwards them to the Office of Labor Protection
and Welfare of the Ministry of Labor at the district where the head
office of the company is located. An employer with 10 or more regular
employees must establish written rules and regulations (in Thai) that
comply with the amendments of the Labor Protection Act B.E. 2541 on
work performance. The regulations must be displayed at the work
premises within 15 days of hiring 10 or more employees. This procedure
takes 24 weeks.
Registration of the Company shall be made within 3 months of the day
of the statutory meeting. Under the Civil and Commercial Code, Section
1111/1, for establishing the company, the director committee may
require memorandum registration and company registration on the
same day. If the promotors complete both steps on the same day, the
required proceedings involving the memorandum promotors are as
follows:
(1) To have the subscribers of all the shares registered in the company;
(2) Under Section 1108, to have a statutory meeting to consider any act
of company, with all subscribers and all promotors presenting at the
meeting and accepting such act in the statutory meeting;
(3) To have promotors transfer all business to the director committee;
and
(4) To have the directors require every subscriber to pay the amount of
shares under Section 1110 paragraph 2, and have such amount be fully
paid.
In case the company incorporation is not registered within the same
day of the registration of memorandum of association, the notice
issued by one of the promotors to summon the statutory meeting shall
be required. Such notice must be sent to all share subscribers at least
seven days prior to the date of meeting.
The required documents for registration of the company which must be
signed by the authorized director(s) and affixed with the company's seal
(if required) shall include but not limited to the followings:
(1) Application form;
(2) Articles of Association;
1 day for
registration and 21
days for the
approval of the
work regulations
THB 750 (Fee for
registration of
memorandum of
association, THB
500 minimum and
THB 25,000
maximum for
government fee
and it shall be
increased for THB
50 every THB
100,000 of initial
capital) + THB
7,500 minimum
(Fee for registration
of the company,
THB
22 Thailand Doing Business 2014
No. Procedure Time to
complete Cost to complete
(3) List of shareholders; |
(4) New director form signed by each director; |
(5) Declaration of Business Operation form; |
(6) List of company registration; |
(7) Certified copies of the MOA and the Objectives; |
(8) A certified copy of the Notice and Minutes of the Statutory
Meeting; |
(9) Confirmation of payment of share capital (at least 25%) by all
subscribers; |
(10) Form for company name reservation |
(11) Form of certification of registration of limited company; and |
(12) Map(s) showing the location(s) of the registered office(s) of head
office and branch office(s) (if any) of the company. |
The promotors prepare the application for registration of the
memorandum of association containing the details specified in
procedure 2; |
The first statutory meeting shall still be convened, provided that the
notice to summon the first statutory meeting is not required; |
The shareholders must pay at least 25% of the registered capital; |
The promotors and authorized signatory director must sign the
applications for registration of memorandum of association and for
registration of incorporation, respectively, before Private Limited
Companies Registrar, attorney at law, or auditor registered with the
Registrar. |
23 Thailand Doing Business 2014
No. Procedure Time to
complete Cost to complete
However, if the company has adopted complicated articles of
association, the Registrar may take a few days to review the company's
articles of association. In such case, the registration of company
incorporation may be prolonged for a few days or more. |
Under the Notice of the Director General of Revenue Department dated
11 January 2012, which is effective from 1 February 2012, companys
registration number shall be the same as its tax ID. |
Thus, the company is not further required to obtain taxpayer
identification number or card anymore. |
Employers (with one or more employees) must register their employees
for social security and workers compensation insurance at the Social
Security Office, Ministry of Labor. |
* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.
24 Thailand Doing Business 2014
DEALING WITH CONSTRUCTION PERMITS
Regulation of construction is critical to protect the
public. But it needs to be efficient, to avoid
excessive constraints on a sector that plays an
important part in every economy. Where complying
with building regulations is excessively costly in
time and money, many builders opt out. They may
pay bribes to pass inspections or simply build
illegally, leading to hazardous construction that
puts public safety at risk. Where compliance is
simple, straightforward and inexpensive, everyone
is better off.
What do the indicators cover?
Doing Business records the procedures, time and
cost for a business in the construction industry to
obtain all the necessary approvals to build a
warehouse in the economys largest business city,
connect it to basic utilities and register the
property so that it can be used as collateral or
transferred to another entity.
The ranking on the ease of dealing with
construction permits is the simple average of the
percentile rankings on its component indicators:
procedures, time and cost.
To make the data comparable across economies,
Doing Business uses several assumptions about the
business and the warehouse, including the utility
connections.
The business:
Is a limited liability company operating in
the construction business and located in
the largest business city.
Is domestically owned and operated.
Has 60 builders and other employees.
The warehouse:
Is a new construction (there was no
previous construction on the land).
Has complete architectural and technical
plans prepared by a licensed architect or
engineer.
WHAT THE DEALING WITH CONSTRUCTION
PERMITS INDICATORS MEASURE
Procedures to legally build a warehouse
(number)
Submitting all relevant documents and
obtaining all necessary clearances, licenses,
permits and certificates
Submitting all required notifications and
receiving all necessary inspections
Obtaining utility connections for water,
sewerage and a land telephone line
Registering the warehouse after its
completion (if required for use as collateral or
for transfer of the warehouse)
Time required to complete each procedure
(calendar days)
Does not include time spent gathering
information
Each procedure starts on a separate day.
Procedures that can be fully completed online
are an exception to this rule.
Procedure considered completed once final
document is received
No prior contact with officials
Cost required to complete each procedure (%
of income per capita)
Official costs only, no bribes
Will be connected to water, sewerage
(sewage system, septic tank or their
equivalent) and a fixed telephone line. The
connection to each utility network will be 10
meters (32 feet, 10 inches) long.
Will be used for general storage, such as of
books or stationery (not for goods requiring
special conditions).
Will take 30 weeks to construct (excluding all
delays due to administrative and regulatory
requirements).
25 Thailand Doing Business 2014
DEALING WITH CONSTRUCTION PERMITS
Where does the economy stand today?
What does it take to comply with the formalities to
build a warehouse in Thailand? According to data
collected by Doing Business, dealing with construction
permits there requires 8 procedures, takes 157.0 days
and costs 8.3% of income per capita (figure 3.1).
Figure 3.1 What it takes to comply with formalities to build a warehouse in Thailand
Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the
total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the
Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the
end of this chapter.
Source: Doing Business database.
26 Thailand Doing Business 2014
DEALING WITH CONSTRUCTION PERMITS
Globally, Thailand stands at 14 in the ranking of 189
economies on the ease of dealing with construction
permits (figure 3.2). The rankings for comparator
economies and the regional average ranking provide
other useful information for assessing how easy it is for
an entrepreneur in Thailand to legally build a
warehouse.
Figure 3.2 How Thailand and comparator economies rank on the ease of dealing with construction permits
Source: Doing Business database.
27 Thailand Doing Business 2014
DEALING WITH CONSTRUCTION PERMITS
What are the changes over time?
The benchmarks provided by the economies that over
time have had the best performance regionally or
globally on the procedures, time or cost required to
deal with construction permits (figure 3.3) help show
what is possible in making it easier to deal with
construction permits. And changes in regional
averages can show where Thailand is keeping upand
where it is falling behind.
Figure 3.3 Has dealing with construction permits become easier over time?
Procedures (number)
Time (days)
28 Thailand Doing Business 2014
DEALING WITH CONSTRUCTION PERMITS
Cost (% of income per capita)
Note: DB2013 rankings shown are not last years published rankings but comparable rankings for DB2013 that capture the
effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to
the sample this year. For more information on no practice marks, see the data notes.
Source: Doing Business database.
29 Thailand Doing Business 2014
DEALING WITH CONSTRUCTION PERMITS
Smart regulation ensures that standards are met while
making compliance easy and accessible to all.
Coherent and transparent rules, efficient processes and
adequate allocation of resources are especially
important in sectors where safety is at stake.
Construction is one of them. In an effort to ensure
building safety while keeping compliance costs
reasonable, governments around the world have
worked on consolidating permitting requirements.
What construction permitting reforms has Doing
Business recorded in Thailand (table 3.1)?
Table 3.1 How has Thailand made dealing with construction permits easieror not?
By Doing Business report year
DB year Reform
DB2009 No reform as measured by Doing Business.
DB2010 No reform as measured by Doing Business.
DB2011 No reform as measured by Doing Business.
DB2012 No reform as measured by Doing Business.
DB2013 No reform as measured by Doing Business.
DB2014 No reform as measured by Doing Business.
Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
30 Thailand Doing Business 2014
DEALING WITH CONSTRUCTION PERMITS
What are the details?
The indicators reported here for Thailand are
based on a set of specific proceduresthe steps
that a company must complete to legally build a
warehouseidentified by Doing Business through
information collected from experts in construction
licensing, including architects, civil engineers,
construction lawyers, construction firms, utility
service providers and public officials who deal with
building regulations. These procedures are those
that apply to a company and structure matching
the standard assumptions used by Doing Business
in collecting the data (see the section in this
chapter on what the indicators cover).
BUILDING A WAREHOUSE
City : Bangkok
Estimated
Warehouse Value : THB 8,454,000
The procedures, along with the associated time and
cost, are summarized below.
Summary of procedures for dealing with construction permits in Thailand and the time and cost
No. Procedure Time to
complete Cost to complete
1
Request a building permit from the Bangkok Metropolitan
Authority
An application for a permit to construct, alter, remove, or reallocate a
building is required for any building. For buildings of no more than four
stories or 15 meters in height, which excludes any tall building,
extraordinarily large building, hotel, hospital, all kinds of factories
(except a household business or any business that does not cause any
disturbance to the public), the application must be submitted to the
relevant District Office with the following documents attached:
A copy of the applicant's corporate registration
A copy of the land title deed
Permission to use the land space for construction or lease agreement.
The personal and tax identification cards of the applicant
Written permission of the architect and a copy of a valid professional
license
Written permission of the design/calculation engineer and a copy of a
valid professional license
Building plan
A calculation of building structure
For an industrial factory, hospital, fresh market, condominium,
apartment, and any undesirable commercial building, details of the
water treatment system and its calculation must be provided
The fees vary depending on the actual space area and size of the
building:
THB 0.50 per square meter for a building not taller than 12 meters
THB 2.00 per square meter for a building taller than 12 meters but not
more than 15 meters or three floors
THB 4.00 per square meter of the entire building space area for a
building taller than 15 meters or three floors
1 day THB 650
31 Thailand Doing Business 2014
No. Procedure Time to
complete Cost to complete
In the case considered here, the cost is THB 0.50 per square meter, or
THB 650.00 total.
A notice to the local authority in lieu of the building permit could be
made. The application could be submitted to the local authority in a
situation where construction work must be commenced urgently. The
following supporting documents must be attached to the application to
the local authority:
A copy of the applicant's corporate registration
A copy of the land title deed
Permission to use the land space for construction or lease agreement
Tax identification card of the applicant
Written permission of the senior architect and a copy of a valid
professional license
Written permission of the senior design/calculation engineer and a
copy of a valid professional license
Written permissions of the architect and engineer who will be the
construction supervisors and copies of their valid professional licenses
Certificate of building design
Building plan
Calculation of the building area
Acknowledgement of the notification is normally granted within the
day of filing the complete application. The cost is the same as for
obtaining a building permit.
2
Receive pre-approval inspection from the Bangkok Metropolitan
Authority
Before the plan approval, the municipal authority inspects the site to
confirm that the drawing submitted accurately represents the project
on site. The pre-approval inspection takes place after the drawing is
submitted. The building control officers of the Bangkok Metropolitan
Authority process this approval.
1 day no charge
3
Obtain a building permit from the Bangkok Metropolitan
Authority
73 days no charge
4
Notify the local authority and request approval of building
controller
After the building permit has been granted, the name of the
construction supervisor must be given to the local authority with the
permission of that supervisor. The latter could be any qualified person,
including the building owner, unless that person is prohibited by the
regulations of the Engineering or Architectural Profession Act.
The following documents must be submitted with the application:
Written permission of the building controller and his or her
professional license
30 days no charge
32 Thailand Doing Business 2014
No. Procedure Time to
complete Cost to complete
A copy of the existing license
It is assumed that one of BuildCos employees or owners satisfies the
requirements for being a construction supervisor. It is common for the
supervisor to be the owner or one of the employees of the construction
company. The construction supervisor should verify building conditions
periodically.
5
Request and connect to telephone
The company should contact TOT Public Company Limited to request a
telephone connection.
21 days THB 3,350
6
* Request and connect to water
The company should contact the Metropolitan Water Work authority
(MWA) to request a water connection.
5 days THB 9,500
7
Receive final inspection
1 day THB 10
8
Obtain occupancy permit
30 days no charge
* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.
33 Thailand Doing Business 2014
GETTING ELECTRICITY
Access to reliable and affordable electricity is vital
for businesses. To counter weak electricity supply,
many firms in developing economies have to rely
on self-supply, often at a prohibitively high cost.
Whether electricity is reliably available or not, the
first step for a customer is always to gain access by
obtaining a connection.
What do the indicators cover?
Doing Business records all procedures required for
a local business to obtain a permanent electricity
connection and supply for a standardized
warehouse, as well as the time and cost to
complete them. These procedures include
applications and contracts with electricity utilities,
clearances from other agencies and the external
and final connection works. The ranking on the
ease of getting electricity is the simple average of
the percentile rankings on its component
indicators: procedures, time and cost. To make the
data comparable across economies, several
assumptions are used.
The warehouse:
Is located in the economys largest
business city, in an area where other
warehouses are located.
Is not in a special economic zone where
the connection would be eligible for
subsidization or faster service.
Has road access. The connection works
involve the crossing of a road or roads but
are carried out on public land.
Is a new construction being connected to
electricity for the first time.
Has 2 stories, both above ground, with a
total surface of about 1,300.6 square
meters (14,000 square feet), and is built on
a plot of 929 square meters (10,000 square
feet).
The electricity connection:
Is 150 meters long and is a 3-phase, 4-wire Y,
140-kilovolt-ampere (kVA) (subscribed
capacity) connection.
WHAT THE GETTING ELECTRICITY
INDICATORS MEASURE
Procedures to obtain an electricity
connection (number)
Submitting all relevant documents and
obtaining all necessary clearances and permits
Completing all required notifications and
receiving all necessary inspections
Obtaining external installation works and
possibly purchasing material for these works
Concluding any necessary supply contract and
obtaining final supply
Time required to complete each procedure
(calendar days)
Is at least 1 calendar day
Each procedure starts on a separate day
Does not include time spent gathering
information
Reflects the time spent in practice, with little
follow-up and no prior contact with officials
Cost required to complete each procedure
(% of income per capita)
Official costs only, no bribes
Excludes value added tax
Is to either the low-voltage or the medium-
voltage distribution network and either overhead
or underground, whichever is more common in
the economy and area where the warehouse is
located. The length of any connection in the
customers private domain is negligible.
Requires crossing of a 10-meter road but all the
works are carried out in a public land, so there is
no crossing into other people's private property.
Involves installing one electricity meter. The
monthly electricity consumption will be 0.07
gigawatt-hour (GWh). The internal electrical
wiring has been completed.
34 Thailand Doing Business 2014
GETTING ELECTRICITY
Where does the economy stand today?
What does it take to obtain a new electricity
connection in Thailand? According to data collected by
Doing Business, getting electricity there requires 4
procedures, takes 35 days and costs 67.3% of income
per capita (figure 4.1).
Figure 4.1 What it takes to obtain an electricity connection in Thailand
Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of
the getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures
reflected here, see the summary at the end of this chapter.
Source: Doing Business database.
35 Thailand Doing Business 2014
GETTING ELECTRICITY
Globally, Thailand stands at 12 in the ranking of 189
economies on the ease of getting electricity (figure
4.2). The rankings for comparator economies and the
regional average ranking provide another perspective
in assessing how easy it is for an entrepreneur in
Thailand to connect a warehouse to electricity.
Figure 4.2 How Thailand and comparator economies rank on the ease of getting electricity
Source: Doing Business database.
36 Thailand Doing Business 2014
GETTING ELECTRICITY
Even more helpful than rankings on the ease of getting
electricity may be the indicators underlying those
rankings (table 4.1). And regional and global best
performers on these indicators may provide useful
benchmarks.
Table 4.1 The ease of getting electricity in Thailand
Indicator Thailand DB2014 Thailand DB2013
Best performer in
East Asia & Pacific
DB2014
Best performer
globally DB2014
Rank 12 12 Hong Kong SAR,
China (5) Iceland (1)
Procedures (number) 4 4 Timor-Leste* (3) 10 Economies* (3)
Time (days) 35 35 Taiwan, China (24) Germany (17)
Cost (% of income per
capita) 67.3 75.3 Hong Kong SAR,
China (1.5) Japan (0.0)
Note: DB2013 rankings shown are not last years published rankings but comparable rankings for DB2013 that capture the
effects of such factors as data corrections and the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to
the sample this year.
* Two or more economies share the top ranking on this indicator. For a list of these economies, see the Doing Business website
(http://www.doingbusiness.org).
Source: Doing Business database.
37 Thailand Doing Business 2014
GETTING ELECTRICITY
Obtaining an electricity connection is essential to
enable a business to conduct its most basic operations.
In many economies the connection process is
complicated by the multiple laws and regulations
involvedcovering service quality, general safety,
technical standards, procurement practices and
internal wiring installations. In an effort to ensure
safety in the connection process while keeping
connection costs reasonable, governments around the
world have worked to consolidate requirements for
obtaining an electricity connection. What reforms in
getting electricity has Doing Business recorded in
Thailand (table 4.2)?
Table 4.2 How has Thailand made getting electricity easieror not?
By Doing Business report year
DB year Reform
DB2012 No reform as measured by Doing Business.
DB2013 No reform as measured by Doing Business.
DB2014 No reform as measured by Doing Business.
Source: Doing Business database.
38 Thailand Doing Business 2014
GETTING ELECTRICITY
What are the details?
The indicators reported here for Thailand are based on
a set of specific proceduresthe steps that an
entrepreneur must complete to get a warehouse
connected to electricity by the local distribution
utilityidentified by Doing Business. Data are collected
from the distribution utility, then completed and
verified by electricity regulatory agencies and
independent professionals such as electrical engineers,
electrical contractors and construction companies. The
electricity distribution utility surveyed is the one
serving the area (or areas) in which warehouses are
located. If there is a choice of distribution utilities, the
one serving the largest number of customers is
selected.
OBTAINING AN ELECTRICITY CONNECTION
City: Bangkok
Name of Utility: Metropolitan Electricity
Authority
The procedures are those that apply to a warehouse
and electricity connection matching the standard
assumptions used by Doing Business in collecting the
data (see the section in this chapter on what the
indicators cover). The procedures, along with the
associated time and cost, are summarized below.
Summary of procedures for getting electricity in Thailandand the time and cost
No. Procedure Time to
complete Cost to complete
1
Submit application at Metropolitan Electricity Authority (MEA) and
await estimate
The customer can submit the application for connection online. The cost
estimate is provided after site inspection, but if GIS data is available, no
site inspection is needed. GIS data is available for most of the city.
Documents required for the application are copy of identification card,
copy of census registration, copy of contract of sales, rent, lease, copy of
company affidavit, power of attorney document as well as location map,
single line diagram, load schedule and electricity line diagram, detail of
use (e.g. areas, machine, electric equipment and type of building) .
Usually, the representative of the owner of the warehouse would submit
the application.
12 calendar days no charge
2
Metropolitan Electricity Authority (MEA) conducts external
connection works
The utility conducts the external connection works. All cable and
equipment for external connection are provided by utility. If a
transformer needs to be installed, it would belong to the utility and other
customers would use the transformer as well. The connection fee by MEA
is based on a 140 meters connection. For 150 meters, the client would
have to pay the cost for 10 meters of cable in addition to the connection
fee.
22 calendar days THB 107,361.0
39 Thailand Doing Business 2014
No. Procedure Time to
complete Cost to complete
3
Customer submits request and receives internal inspection by
Metropolitan Electricity Authority (MEA)
The client submits a request for an internal wiring inspection by the
utility. The client has to be present during the inspection.
2 calendar days THB 2,743.5
4
Metropolitan Electricity Authority (MEA) installs meter, final
connection and electricity starts flowing
After the connection is finished, the Meter Service Section of the utility
installs the meter. After that the final connection is done by the
Distribution System Maintenance Section and electricity starts flowing.
1 calendar day no charge
* Takes place simultaneously with another procedure.
Source: Doing Business database.
40 Thailand Doing Business 2014
REGISTERING PROPERTY Ensuring formal property rights is fundamental.
Effective administration of land is part of that. If
formal property transfer is too costly or
complicated, formal titles might go informal
again. And where property is informal or poorly
administered, it has little chance of being
accepted as collateral for loanslimiting access to
finance.
What do the indicators cover?
Doing Business records the full sequence of
procedures necessary for a business to purchase
property from another business and transfer the
property title to the buyers name. The transaction
is considered complete when it is opposable to
third parties and when the buyer can use the
property, use it as collateral for a bank loan or
resell it. The ranking on the ease of registering
property is the simple average of the percentile
rankings on its component indicators: procedures,
time and cost.
To make the data comparable across economies,
several assumptions about the parties to the
transaction, the property and the procedures are
used.
The parties (buyer and seller):
Are limited liability companies, 100%
domestically and privately owned.
Are located in the economys largest
business city.
Have 50 employees each, all of whom are
nationals.
Perform general commercial activities.
The property (fully owned by the seller):
Has a value of 50 times income per capita.
The sale price equals the value.
Is registered in the land registry or cada-
stre, or both, and is free of title disputes.
Is located in a periurban commercial zone,
WHAT THE REGISTERING PROPERTY
INDICATORS MEASURE
Procedures to legally transfer title on
immovable property (number)
Preregistration (for example, checking for liens,
notarizing sales agreement, paying property
transfer taxes)
Registration in the economys largest business city
Postregistration (for example, filing title with
the municipality)
Time required to complete each procedure
(calendar days)
Does not include time spent gathering
information
Each procedure starts on a separate day.
Procedures that can be fully completed online
are an exception to this rule.
Procedure considered completed once final
document is received
No prior contact with officials
Cost required to complete each procedure
(% of property value)
Official costs only, no bribes
No value added or capital gains taxes included
and no rezoning is required.
Has no mortgages attached and has been
under the same ownership for the past 10
years.
Consists of 557.4 square meters (6,000 square
feet) of land and a 10-year-old, 2-story
warehouse of 929 square meters (10,000
square feet). The warehouse is in good
condition and complies with all safety
standards, building codes and legal
requirements. There is no heating system. The
property will be transferred in its entirety.
41 Thailand Doing Business 2014
REGISTERING PROPERTY
Where does the economy stand today?
What does it take to complete a property transfer in
Thailand? According to data collected by Doing
Business, registering property there requires 2
procedures, takes 2.0 days and costs 6.3% of the
property value (figure 5.1).
Figure 5.1 What it takes to register property in Thailand
Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the
total time calculation. For more information on the methodology of the registering property indicators, see the Doing Business
website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this
chapter.
Source: Doing Business database.
42 Thailand Doing Business 2014
REGISTERING PROPERTY
Globally, Thailand stands at 29 in the ranking of 189
economies on the ease of registering property (figure
5.2). The rankings for comparator economies and the
regional average ranking provide other useful
information for assessing how easy it is for an
entrepreneur in Thailand to transfer property.
Figure 5.2 How Thailand and comparator economies rank on the ease of registering property
Source: Doing Business database.
43 Thailand Doing Business 2014
REGISTERING PROPERTY
What are the changes over time?
The benchmarks provided by the economies that over
time have had the best performance regionally or
globally on the procedures, time or cost required to
complete a property transfer (figure 5.3) help show
what is possible in making it easier to register
property. And changes in regional averages can show
where Thailand is keeping upand where it is falling
behind.
Figure 5.3 Has registering property become easier over time?
Procedures (number)
Time (days)
44 Thailand Doing Business 2014
REGISTERING PROPERTY
Cost (% of property value)
Note: DB2013 rankings shown are not last years published rankings but comparable rankings for
DB2013 that capture the effects of such factors as data corrections and the addition of 4 economies
(Libya, Myanmar, San Marino and South Sudan) to the sample this year. For more information on no
practice marks, see the data notes.
Source: Doing Business database.
45 Thailand Doing Business 2014
REGISTERING PROPERTY
Economies worldwide have been making it easier for
entrepreneurs to register and transfer propertysuch
as by computerizing land registries, introducing time
limits for procedures and setting low fixed fees. Many
have cut the time required substantiallyenabling
buyers to use or mortgage their property earlier. What
property registration reforms has Doing Business
recorded in Thailand (table 5.1)?
Table 5.1 How has Thailand made registering property easieror not?
By Doing Business report year
DB year Reform
DB2009
Thailand reduced two taxes, the transfer fee from 2% to 0.01%,
and the Specific Business Tax (SBT) from 3.3% to 0.11%. The
cost reductions are provisional and valid for one year from
March 2008 to allow the Thai government to assess the results
of the reform in April 2009. As a result, the cost to transfer a
property in Thailand has decreased from 6.3% to 1.13% of
property value.
DB2010 No reform as measured by Doing Business.
DB2011 Thailand made registering property more costly by repealing a
2-year temporary tax reduction for property transfers.
DB2012 Thailand made registering property more expensive by
increasing the registration fee.
DB2013 No reform as measured by Doing Business.
DB2014 No reform as measured by Doing Business.
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business
reports for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
46 Thailand Doing Business 2014
REGISTERING PROPERTY
What are the details?
The indicators reported here are based on a set of
specific proceduresthe steps that a buyer and
seller must complete to transfer the property to the
buyers nameidentified by Doing Business
through information collected from local property
lawyers, notaries and property registries. These
procedures are those that apply to a transaction
matching the standard assumptions used by Doing
Business in collecting the data (see the section in
this chapter on what the indicators cover).
STANDARD PROPERTY TRANSFER
City: Bangkok
Property Value: THB 8,176,521
The procedures, along with the associated time and
cost, are summarized below.
Summary of procedures for registering property in Thailandand the time and cost
No. Procedure Time to
complete Cost to complete
1
Obtain certified copies of companies documents from the Ministry
of Commerce
Parties obtain from the Ministry of Commerce the following documents:
1. Companies' Affidavits confirming the name, address, the amount of
registered capital, names of directors and the authorized signatories.
(THB 200)
2. Certified copies of the Memorandum and Articles of Association of
each party (THB 50 per page, cost of certification)
3. List of shareholders of the company from the Ministry of Commerce to
prove their nationality.
On average, the Memorandum of Association (MoA) has 2 pages and the
Articles of Association (AoA) about 5 pages.
1 day
THB 200
(Affidavits) + THB
700 (MoA, AoA)
2
Parties submit application for registration at the Land Office
The seller and the buyer, or their representatives, must go to the Land
Office where the land is located, and submit an application to register
the sale of the land and the buildings thereon.
The Land Officer checks all the documents (from both the seller and the
buyer) submitted with the application. He will also compare the original
title deed with the original copy kept at the Land Office. All information
in both original title deeds must be the same. If everything is consistent,
he will proceed with the registration of the transfer of ownership. An
official sales agreement is prepared and signed by the authorized
representatives of the seller and buyer. The officer then records the sales
transaction at the back of the original land title deeds (both the land
1 day
THB 10 (title
search) + 2% of
appraised value
(registration fee) +
1% of sale price or
appraised value,
whichever is
higher
(withholding tax) +
3.3% of sale price
or appraised value,
whichever is
higher (Specific
47 Thailand Doing Business 2014
No. Procedure Time to
complete Cost to complete
owner's and the Land Office's copies).
The Land Officer calculates all the registration fees and expenses and
asks the parties to pay and submit to him the receipts. The registration
fee is 2% of the appraised value calculated by the Bureau of Property
Valuation (GAV) and announced by the Treasury Department, Ministry of
Financed every 4 years (Government Appraised Value (GAV)).
The seller has to pay a 1% withholding tax on sale price or GAV -
whichever is higher. (Seller may apply this as a credit towards their
corporate income tax on any capital gain). As the seller is a company,
withholding tax is calculated on the greater of the appraised value and
the sale price.
The seller has to pay stamp duty, which is 0.5% of the appraisal value if
holding period for the individual is more than 5 years. If not, the transfer
will be subject to the Specific Business Tax (SBT). This SBT implies that
the Seller has to pay 3.3% of the appraisal value or the sales price,
whichever is higher. The 3.3% SBT includes a 0.3% municipality tax.
The SBT is imposed on persons who sell their property for trade or a
profit-seeking purpose. Companies who sell real property in Thailand are
deemed to be selling for trade or profit and are subject to specific
business tax. Even if a company sells property in order simply to move to
a new place, it is still deemed to have sold for a trade or profit seeking
purpose.
Accordingly, the company who is the seller in this example will be
subject to SBT. The registration fee, withholding tax and SBT are
collected by the Land Office. The cheques for the taxes are payable to
the Ministry of Finance but collected by the Land Office.
The Land Officer then attaches the receipts to the application, and
submits all documents to the Chief in charge who is authorized to
approve the registration of the transfer. Once the reigistration is
approved, it is deemed completed. The seller will receive one copy of the
registered sale agreement. The buyer will receive another copy of the
registered sale agreement and the original Land Title Deed.
The Seller will need to produce the construction permit and household
registration of the building as evidence to transfer the building.
----
NOTE: the registration cost for the registered property has been
increased since "2012" due to the jump in Appraisal Value (2012-2015).
On average, "17%" increase in Bangkok Metrapolitan area but in prime
area the increase may as high as 100% plus, and at 21% increase in
provincial.
Business Tax)
48 Thailand Doing Business 2014
* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.
49 Thailand Doing Business 2014
GETTING CREDIT
Two types of frameworks can facilitate access to
credit and improve its allocation: credit information
systems and borrowers and lenders in collateral and
bankruptcy laws. Credit information systems enable
lenders rights to view a potential borrowers
financial history (positive or negative)valuable
information to consider when assessing risk. And
they permit borrowers to establish a good credit
history that will allow easier access to credit. Sound
collateral laws enable businesses to use their assets,
especially movable property, as security to generate
capitalwhile strong creditors rights have been
associated with higher ratios of private sector credit
to GDP.
What do the indicators cover?
Doing Business assesses the sharing of credit
information and the legal rights of borrowers and
lenders with respect to secured transactions
through 2 sets of indicators. The depth of credit
information index measures rules and practices
affecting the coverage, scope and accessibility of
credit information available through a public credit
registry or a private credit bureau. The strength of
legal rights index measures whether certain features
that facilitate lending exist within the applicable
collateral and bankruptcy laws. Doing Business uses
case scenarios to determine the scope of the
secured transactions system, involving a secured
borrower and a secured lender and examining legal
restrictions on the use of movable collateral. These
scenarios assume that the borrower:
Is a private, incorporated, limited liability
company.
Has its headquarters and only base of
operations in the largest business city.
WHAT THE GETTING CREDIT INDICATORS
MEASURE
Strength of legal rights index (010)
Rights of borrowers and lenders through
collateral laws
Protection of secured creditors rights through bankruptcy laws
Depth of credit information index (06)
Scope and accessibility of credit information
distributed by public credit registries and
private credit bureaus
Public credit registry coverage (% of adults)
Number of individuals and firms listed in
public credit registry as percentage of adult
population
Private credit bureau coverage (% of adults)
Number of individuals and firms listed in
largest private credit bureau as percentage of
adult population
Has up to 100 employees.
Is 100% domestically owned, as is the lender.
The ranking on the ease of getting credit is based on
the percentile rankings on the sum of its component
indicators: the depth of credit information index and
the strength of legal rights index.
50 Thailand Doing Business 2014
GETTING CREDIT
Where does the economy stand today?
How well do the credit information system and
collateral and bankruptcy laws in Thailand facilitate
access to credit? The economy has a score of 5 on the
depth of credit information index and a score of 5 on
the strength of legal rights index (see the summary of
scoring at the end of this chapter for details). Higher
scores indicate more credit information and stronger
legal rights for borrowers and lenders.
Globally, Thailand stands at 73 in the ranking of 189
economies on the ease of getting credit (figure 6.1).
The rankings for comparator economies and the
regional average ranking provide other useful
information for assessing how well regulations and
institutions in Thailand support lending and borrowing.
Figure 6.1 How Thailand and comparator economies rank on the ease of getting credit
Source: Doing Business database.
51 Thailand Doing Business 2014
GETTING CREDIT
What are the changes over time?
While the most recent Doing Business data reflect how
well the credit information system and collateral and
bankruptcy laws in Thailand support lending and
borrowing today, data over time can help show where
institutions and regulations have been strengthened
and where they have not (table 6.1). That can help
identify where the potential for improvement is
greatest.
Table 6.1 The ease of getting credit in Thailand over time
By Doing Business report year
Indicator DB2005 DB2006 DB2007 DB2008 DB2009 DB2010 DB2011 DB2012 DB2013 DB2014
Rank .. .. .. .. .. .. .. .. 71 73
Strength of legal rights
index (0-10) 5 5 5 5 5 5 5 5 5 5
Depth of credit
information index (0-6) 4 4 5 5 5 5 5 5 5 5
Public registry coverage
(% of adults) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Private bureau
coverage (% of adults) 15.0 18.4 21.7 27.9 31.8 32.9 35.7 41.7 44.1 49.2
Note: n.a. = not applicable (the economy was not included in Doing Business for that year). DB2013 rankings shown are not last
years published rankings but comparable rankings for DB2013 that capture the effects of such factors as data corrections and
the addition of 4 economies (Libya, Myanmar, San Marino and South Sudan) to the sample this year.
Source: Doing Business database.
52 Thailand Doing Business 2014
GETTING CREDIT
One way to put an economys score on the getting
credit indicators into context is to see where the
economy stands in the distribution of scores across
economies. Figure 6.2 highlights the score on the
strength of legal rights index for Thailand in 2013 and
shows the number of economies with this score in
2013 as well as the regional average score. Figure 6.3
shows the same thing for the depth of credit
information index.
Figure 6.2 How strong are legal rights for borrowers
and lenders?
Figure 6.3 How much credit information is shared
and how widely?
Number of economies with each score on strength of legal
rights index (010), 2013
Note: Higher scores indicate that collateral and bankruptcy
laws are better designed to facilitate access to credit.
Source: Doing Business database.
Number of economies with each score on depth of credit
information index (06), 2013
Note: Higher scores indicate the availability of more credit
information, from either a credit registry or a credit bureau,
to facilitate lending decisions. Regional averages for the
depth of credit information index exclude economies with no
credit registry or credit bureau.
Source: Doing Business database.
53 Thailand Doing Business 2014
GETTING CREDIT
When economies strengthen the legal rights of lenders
and borrowers under collateral and bankruptcy laws,
and increase the scope, coverage and accessibility of
credit information, they can increase entrepreneurs
access to credit. What credit reforms has Doing
Business recorded in Thailand (table 6.2)?
Table 6.2 How has Thailand made getting credit easieror not?
By Doing Business report year
DB year Reform
DB2009 No reform as measured by Doing Business.
DB2010 No reform as measured by Doing Business.
DB2011 No reform as measured by Doing Business.
DB2012 No reform as measured by Doing Business.
DB2013 No reform as measured by Doing Business.
DB2014 No reform as measured by Doing Business.
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.
54 Thailand Doing Business 2014
GETTING CREDIT
What are the details?
The getting credit indicators reported here for
Thailand are based on detailed information collected
in that economy. The data on credit information
sharing are collected through a survey of a credit
registry and/or credit bureau (if one exists). To
construct the depth of credit information index, a
score of 1 is assigned for each of 6 features of the
credit registry or credit bureau (see summary of
scoring below).
The data on the legal rights of borrowers and lenders
are gathered through a survey of financial lawyers and
verified through analysis of laws and regulations as
well as public sources of information on collateral and
bankruptcy laws. For the strength of legal rights index,
a score of 1 is assigned for each of 8 aspects related to
legal rights in collateral law and 2 aspects in
bankruptcy law.
Summary of scoring for the getting credit indicators in Thailand
Indicator Thailand East Asia & Pacific
average
OECD high income
average
Strength of legal rights index (0-10) 5 7 7
Depth of credit information index (0-6) 5 4 5
Public registry coverage (% of adults) 0.0 35.6 42.9
Private bureau coverage (% of adults) 49.2 44.8 73.9
Note: In cases where an economys regional classification is OECD high income, regional averages above are only
displayed once. Regional averages for the depth of credit information index exclude economies with no credit
registry or credit bureau. Regional averages for the credit registry coverage exclude economies with no credit
registry. Regional averages for the credit bureau coverage exclude economies with no credit bureau.
Strength of legal rights index (010) Index score: 5
Can any business use movable assets as collateral while keeping possession of the assets; an